GTE Corp. profits escalate 15 percent

CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Capping off a strong second-quarter for major local phone carriers, GTE Corp. said Monday that profits jumped 15 percent on the heels of robust demand for data, wireless and specializes services like "call waiting."

The Irving,Texas-based phone company said earnings rose to $776 million, or 79 cents a share, from $673 million, or 69 cents, a year earlier. Results met the consensus estimate of analysts surveyed by First Call Corp.

Revenue increased 7 percent to $6.3 billion from $5.9 billion, driven by a 62 percent increase in sales of data and Internet services to $227 million. Shares of GTE
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which is in the process of being acquired by Bell Atlantic, fell 13/16 to 75 7/16 Monday.

GTE also said its total number of phone lines rose 10 percent to 25 million.

In the past week, local phone carriers Bell Atlantic, SBC Communications and Ameritech have all reported solid earnings growth. Long-distance provider Sprint, which also has local operations, also performed well.

U S West

On Friday, U S West reported a 9 percent increase in second-quarter profits, as it joined other phone carriers in benefiting from demand for wireless and high-speed data services.

U S West, which agreed last week to merge with Qwest Communications
QWST, +80.18%
said it earned $421 million, or 83 cents a share, up from $385 million, or 76 cents, a year ago. The carrier, the smallest of the Baby Bells, beat the 81-cent consensus estimate of analysts.

U S West
usw
said it added 14,000 customers for its so-called Digital Subscriber Line service, which offers high-speed access and is one of the fastest-growing parts of its business. The service now has 50,000 subscribers. And the carrier added a net 67,000 wireless users, raising its total to 285,000.

Bell ringer

On Wednesday, Bell Atlantic said its data and wireless segments drove second-quarter profits up 11 percent to $1.2 billion, or 75 cents a share, from $1.1 billion, or 68 cents, a year earlier. Results were in line with estimates.

Performing just as well were Ameritech and SBC Communications, which reported their results last Tuesday.

SBC, which is in the process of buying Chicago-based Ameritech, earned $1.2 billion, or 59 cents a share, up from $1 billion, or 51 cents, a year earlier. The company was expected to earn 58 cents. SBC's
SBC, +0.00%
revenue rose 5.2 percent to $7.4 billion from $7 billion. See press release.

For Ameritech
AIT, +0.12%
profits before special items advanced 21 percent to $840 million, or 76 cents a share, from $695 million, or 63 cents, a year ago. That beat the the 72-cent consensus estimate. Revenue climbed 12 percent to a record $4.80 billion from $4.29 billion. See press release.

Including special items, Ameritech reported net income of $819 million, or 74 cents a share, in the latest quarter, compared to net of $1.71 billion, or $1.54, a year ago.

Sprinting ahead

On Thursday Sprint, the nation's third largest long-distance carrier, said earnings rose to $386 million, or 44 cents a share, from $364 million, or 41 cents, a year earlier. That matched estimates.

Revenue from its core operations, including long-distance, rose 7.6 percent to $4.24 billion from $3.95 billion. See press release. Overall, Sprint said long-distance revenue increased 10 percent, led by a 50 percent-plus rise in sales of data services to businesses.

Local phone revenue rose 5 percent, while the number of lines Sprint serves increased 5.3 percent to 7.9 million. Many of the new lines are second lines being used for Internet service, the carrier said.

Wireless results

At its separately traded Sprint PCS
pcs
unit, the wireless segment lost $708 million, or $1.25 a share, up from a pro forma loss of $507 million, or 98 cents, as the carrier continued to build its national network. Revenue jumped to $736 million from $265 million.

Cash flow losses totaled $338 million, which the company said was less than expected. Cash flow is a key indicator of health in fast-growing high-tech sectors and basically measures the ability of company to pay its bills.

In the second quarter, Sprint PCS added an industry-leading 617,000 net subscribers, with average revenue per customer at $54 a month. The carrier now has almost 4 million customers.

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